Whose ‘Loss and Damage’? Promoting the Agency of Beneficiary States

The discussions on loss and damage associated with climate change that opened up within the unfccc in recent years constitute the latest attempt of developing states to obtain something akin to compensation from major greenhouse gas emitters for the adverse social impacts of climate change. These discussions generally contemplate a mechanism financed by developed states that would provide direct support to individuals, corporations, and governments in developing countries (‘vertical’ approach), for instance, through insurance. This article argues that, for practical as well as normative reasons, a loss-and-damage mechanism should instead support vulnerable developing states, in a states-to-states ‘horizontal’ approach. Accordingly, financial support would be provided to developing states that incorporate vulnerable populations and are responsible for protecting them. Three sets of arguments are developed in support of this proposition. First, attributing loss and damage at the individual level is particularly challenging, whereas horizontal approaches allow consideration of probabilistic harm and compensation through bundle payments. Second, horizontal approaches are more suitable for pursuing goals such as economic efficiency, the reduction of loss and damage, the creation of an incentive for climate change mitigation, and broader goals of social justice. Third, vertical approaches go against prevailing principles of international law and involve unjustified interference in the domestic affairs of developing states.